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Nigeria Loses Trillions to Fuel Subsidies and Oil Theft




The Nigeria Extractive Industries Transparency Initiative (NEITI) has revealed that Nigeria has lost trillions of naira to fuel subsidies and oil theft over the years.

In a policy dialogue on oil swap in Abuja, NEITI’s Executive Secretary, Orji Ogbonnaya-Orji disclosed that between 2005 and 2021, the country spent over N13tn ($74bn) on fuel subsidies.

He stated that this amount is equivalent to Nigeria’s entire budget for health, education, agriculture, and defence in the last five years.

In addition to the huge cost of fuel subsidies, Nigeria has also lost N16.3tn to oil theft between 2009 and 2020. According to Orji, this translates to over 140,000 barrels of crude oil lost per day.

He further explained that Nigeria lost 4.2 billion litres of petroleum products from refineries valued at $1.84bn between 2009 and 2018.

The NEITI boss emphasized the need for the full deregulation of the petroleum sector, stating that this would permanently lay to rest the conversation around oil swaps.

He also highlighted the negative effects of fuel subsidies, including the deterioration of the downstream sector and disincentivized private sector investment in the petroleum sector.

While the Petroleum Industry Act (PIA) made provisions for the deregulation of the downstream sector, the progress on its implementation has not been made public.

The NEITI Executive Secretary urged civil society to step up advocacy for the conclusion of the committee’s work and submission of its report to the President before the expiration of this administration.

Nigeria’s huge losses to fuel subsidies and oil theft highlight the urgent need for the full deregulation of the petroleum sector.

This would not only end the conversation around oil swaps but also lead to increased private sector investment, job creation, and economic growth.

It is important for the government to prioritize the implementation of the PIA to address the challenges facing the downstream sector.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Nasdaq,, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Nigeria’s Palm Oil Imports from Malaysia Skyrocket by 72,448 Metric Tons in Four Months

Palm oil imports from Malaysia rose by 353 percent in the first four months of the year despite forex restrictions imposed on the commodity.



palm oil

Palm oil imports from Malaysia rose by 353 percent in the first four months of the year despite forex restrictions imposed on the commodity.

According to the latest data from the Malaysian Palm Oil Council, Nigeria’s palm oil imports rose by 72,448 metric tons (MTN) to 92,961 MTN between January and April 2023, up from 20,513 MT imported in the same period of 2022.

In the whole of 2022, Nigeria imported 227,035 MT of palm oil from Malaysia, even with the nation’s borders closed.

“Nigeria’s oil palm imports from Malaysia will continue to increase for the time being because our investment in the industry is still very insignificant,” Henry Olatujoye, managing director, Palmtrade and Commodities Development Nigeria Ltd, said.

“We estimated that our local/domestic consumption is averaging 2.4 million tons in a year, and our first-class developers – Okomu, Presco, and others, do not annually produce up to 800,000 tons.

“If we estimate the pocket smallholder farmers to be contributing up to a million tons, we’d still have a shortfall compared to demand,” Olatujoye added.

Amidst years of stagnant output growth and increasing local demand, Nigeria has experienced a substantial production deficit in the palm oil industry, leading to a significant reliance on imports. Over the past five years, an average of 25 percent of the country’s annual domestic palm oil consumption has been met through imported supplies. This worrying trend underscores the challenges faced by Nigeria in meeting the rising demand for palm oil within its borders.

According to the data, local production in Nigeria accounts for roughly 78 percent of the total palm oil consumption, resulting in a deficit of 0.6 million MT between 2012 and 2021. This deficit emphasizes the significant challenges the country confronts in meeting the growing demand for palm oil domestically.

Alphonsus Inyang, the president of the National Palm Produce Association of Nigeria, emphasized that palm oil prices in Nigeria have surged, making it the most expensive among all Crude Palm Oil producing countries. This price escalation is primarily attributed to the high demand for the commodity.

Inyang further explained, “A metric ton of palm oil sells between N1-1.2 million, depending on your location.” The soaring prices can be attributed to the neglect of primary palm oil production by successive governments, resulting in inadequate funding and limited interest in the sector.

The lack of financial support and government focus on oil palm production has led to the neglect and deterioration of the sector. Consequently, numerous farmers have lost their livelihoods due to insufficient profits for maintenance and expansion, hindering their ability to produce more palm oil.


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Nigeria’s Economic Performance is Weighing Down Continent’s Average

In 2019, Africa’s GDP was $2,6 trillion, but new research from McKinsey estimates that this could have been closer to $3 trillion if the continent had managed to continue to grow at the pace it achieved from 2000 to 2010.



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In 2019, Africa’s GDP was $2,6 trillion, but new research from McKinsey estimates that this could have been closer to $3 trillion if the continent had managed to continue to grow at the pace it achieved from 2000 to 2010. Fully 65 percent of this difference can be explained by a drop off in growth in Africa’s “big three” economies, Egypt, South Africa, and Nigeria, with Nigeria having the largest impact.

The research, published today in a flagship report: Reimagining economic growth in Africa: Turning diversity into opportunity takes a granular look at Africa’s economic performance across countries, sectors, and companies, to highlight successes, identify obstacles to growth, and suggest ways the continent can harness its diversity to reignite growth after a decade of slowdown.

Nigeria is one of 13 African countries that the research classifies as “recent slowdowns”, economies that outperformed the continent’s average economic growth in the first decade of the millennium, but have since slowed between 2010-2019.

The slowing pace of economic growth in these 13 countries—representing 37 percent of Africa’s population and around 46 percent of its GDP in 2019—was driven by slower than average growth in exports and investment per capita compared to the rest of Africa, even though they had the highest levels of urbanization. These economies account for over half of the continent’s exports of primary commodities. Between 2010 and 2019, growth in these countries did not keep pace with population growth—in aggregate, 27 million more people in this cluster lived in poverty at the end of the period—and per capita consumption growth was stagnant at 0.8 percent a year on average.

However, the slow growth in these countries is not representative of the entire continent.

The report stresses Africa’s diversity and points out that nearly half its people live in countries where economies have grown consistently over the past 20 years. Economic growth in these primarily midsized economies in East and West Africa has averaged more than 4 percent annual GDP growth.

“In a stark illustration that there is no ‘one Africa’, decelerating growth among recent slowdown and slow grower economies combined to slow the continent’s growth. Nigeria had the largest impact. Its services sector alone was responsible for 30 percent of the continent’s slowing economic pace.” – Mayowa Kuyoro, partner in McKinsey’s Lagos office and co-author of the report.

Reaping the productivity dividend

As the fastest urbanizing continent on Earth, and home to a young and fast-growing workforce and growing consumer class, the report argues that, despite its disappointing performance over the past decade, Africa is an exciting new market that is ripe for prosperity.

One of the key trends driving this optimism is the fact that the African economy has been undergoing a profound structural shift to services over the past 20 years, as people left work in the fields to take jobs in trade and other services in cities. Employment in services increased from 30 percent to 39 percent over that period and the sector is set to absorb almost half of all new labor-market entrants by 2030, although in 2019, half the African workforce remained in agriculture.

But while services create significant opportunities for African countries to boost economic output and job creation, this can only be realized if productivity in the sector improves. In 2019, African services productivity was the lowest of any region in the world and the sector recorded negative productivity growth of -0.1 percent during the 2010-2019 decade. This is, in part, due to a skewed shift to certain subsectors, notably trade, that has low productivity by global standards due to high levels of informality and fragmentation. In contrast, financial and business services are highly productive and contribute the greatest economic value, accounting for nearly a fifth of Africa’s GVA today.

Targeted interventions to raise productivity across services include increasing digitization, developing skills, and exporting talent. The research found that if Africa matched the productivity growth of Asia’s strongest services hubs, it could add $1.4 trillion to the continent’s economy, almost doubling of the GVA from services today. This would create 225 million jobs by 2030—a crucial consideration in the light of Africa’s rapidly growing workforce.

Additional opportunities for productivity-led growth identified in the report lie in increasing domestic and export manufacturing to meet burgeoning local demand, increasing regional connectedness, investing to enhance resource productivity and to tap into new opportunities notably to support the global transition to net zero, and spurring the agricultural transition. Agricultural provides almost half of Africa’s employment and is crucial to the continent’s food security, so improving its productivity is important to lives and livelihoods, especially in light of rising threats from climate change and rapid urbanization.

“Productivity must be established as the foundation of economic growth and resilience on the continent. Africa can no longer rely on growth determined by the vicissitudes of the global demand for commodities and export markets. Its complex, multifaceted diversity and thriving demographics are assets that can be developed and fostered to support a productivity-led economy.” – Mayowa Kuyoro, partner in McKinsey’s Lagos office and co-author of the report.

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Promoting Sustainable Nigerian Leather Products in the Global Market

The term “globalization” gained popularity in the early 1990s; with technology advancement, it has continued to shape modern everyday life, making it a global village whilst growing interdependence of the world’s economies, cultures, and populations. Countries have built economic partnerships to facilitate continued surge in cross-border trade in goods and services, technology, and flows of investment, people, and information.




The term “globalization” gained popularity in the early 1990s; with technology advancement, it has continued to shape modern everyday life, making it a global village whilst growing interdependence of the world’s economies, cultures, and populations. Countries have built economic partnerships to facilitate continued surge in cross-border trade in goods and services, technology, and flows of investment, people, and information.

With a long history of producing high-quality leather products, Nigeria has a rich heritage of leather production and to build a sustainable ‘Made-in-Nigeria’ brand, it is essential to promote Nigerian leather products in the global market.

Globalisation has made the global market indeed a global village through technology. To aid balance of trade, countries must ensure it manufactures for local consumption then produces with a mindset of exporting to foreign countries. To achieve this, its products must first meet global standards and receive acceptance from its local market. Nigeria is in a vantage point to promote African leather products in the global market, being one of the continent’s biggest producers and exporters of raw leather materials.

With advanced technology from developed economies to reduce cost of production, coupled with their capacity to export, local consumers in developing economies have easy access to imported products which has adverse effects on the local economy, such as unemployment and a decrease in demand for locally produced goods. As the world continues to evolve, it is important to strike a balance between importing goods and supporting local businesses to improve GDP and improved economy.

The benefits of manufacturing goods locally in a nation instead of importing should not be overlooked. It has a long-term value on a country’s economy than the latter as any developing country seeking to achieve economic growth should endeavour to reduce importation to the barest minimum and utilize local resources, even if not having the required production capacity for export purposes.  In the case where a country starts focusing on manufacturing its products locally, there will be an increase in the employment rate, the currency would be valuable and local culture would be strengthened. In Nigeria for instance, those products that are manufactured locally are referred to as “Made-in-Nigeria goods”.

The manufacturing sector in Nigeria has several sub-sectors such as Petroleum and coal products, electrical equipment, appliances and components, printing and related support activities, textile apparel, leather and footwear, fabricated metal products, chemical and pharmaceutical products, food, beverage and tobacco products, paper products, furniture and related products, plastics and rubber products, and transportation equipment, among others continue to play a significant role in generating employment, increasing productivity, and driving economic growth for the nation. The sector has also contributed to the country’s quest to move away from oil dependency and lean towards the green economy.

One of the sub-sectors that has proven resourceful in contributing to the Made-in-Nigeria project and zero oil initiative is the Leather industry. With the total trade of the leather products presently between $300 and $400 billion globally, experts believe that Nigeria could account for 15 to 20 per cent to hit $20 billion by 2025. According to recent statistics, the Nigerian leather industry is estimated to be worth over $1 billion and is expected to grow annually by 2.88% (Compound Annual Growth Range 2023-2028). As the third largest in Africa, after South Africa and Ethiopia, the Nigerian leather industry is also a vital source of employment and income for many Nigerians, especially those in rural areas. The industry provides employment to over 750,000 people, with a significant number of jobs in tanning, leather goods production, most especially the fashion industry.

Leather has continued to remain a versatile and essential material in the fashion industry, offering durability, luxury, and timeless style for both men and women. Due to its durability and luxurious appeal, it is widely used in various forms of fashionable items such as shoes, bags, jackets, belts, and other accessories.

In contributing to the growth of a sustainable Made-In-Nigeria products, for six years now, a game changer in the leather industry, Lagos Leather Fair, has consistently given leather designers the platform to showcase their expertise. Established and emerging designers now have the opportunity to showcase their designs and gain recognition in the Nigeria and Africa leather industry. The annual fair provides a much-needed and solution-based networking platform for leather designers and other players in Nigeria and other African countries to promote and showcase Made-in-Africa and local talent.

According to the founder of Lagos Leather Fair, Femi Olayebi, “The annual celebration of the Lagos Leather Fair is a proof point of our unflinching commitment towards finding sustainable solutions to scale the African leather industry and ensure that the Made-in-Nigeria Project and Zero-Oil Initiative becomes a reality. For over five years, we have created an enabling environment for key players to maximise the potential of the leather industry. We are delighted about LLF2023 and look forward to the significant impact it will make in Nigeria and across Africa.”

This year’s edition themed “Staying Ahead: Creativity, Collaboration, Commitment” is set to improve the narrative that encourages sustainable Made in Nigeria business. Through the proposed LLF Lab and Accelerator programme, leather designers will have access to mentorship and development programs from entrepreneurs who are already experts in the industry.

LLF 2023 will also feature a series of local and international speakers who will share insights on relevant conversations that affect the African leather industry and a well-curated series of workshops for up-and-coming designers willing to thrive as a manufacturer in Nigeria. The workshops for budding leather designers will feature branding workshops where the fundamentals of branding will be explored, a shoe-making workshop to provide a basic understanding of the techniques of shoemaking and a social media/marketing presentation using a case study review of different brands.

The Lagos Leather Fair is set to hold on the 17th and the 18th, June at the Balmoral Convention Centre, Victoria Island, and just like the 5 editions done in the past, LLF 2023 is anticipated to continue from the previous years by strengthening the narrative that ensures the Made-in-Nigeria Project and Zero-Oil Initiative become a reality and fostering the nation’s talent and economic growth.




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